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Reliance power IPO

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Capital Market is presently a very well fought battle between the BULLS and the BEARS hence you can observe a see-saw (VOLATILITY in market terms) very prominent in the INTRADAY charts. With global cues not looking positive and a recession impending in US as forecasted by many agencies BEARS are presently reining the Indian Stock Exchanges. IPO listing has been highly underweighted by agencies as of now as IPOs like Wochardt, EMAAR MGF had to withdraw themselves keeping the investors sentiment in consideration. Reliance Power was of no exception and faced the same brunt.Reliance Power can be attributed some of the blame for such a poor show of the IPO on the first day.

Many Brokerage houses and MFs consider the pricing to exorbitant. The company will start earning only after 2010 when it starts performing and is only on paper and is a dream as of now. So it does not pay to invest in a paper company as of now. Some of the experts have tagged it as a “EMOTIVE ISSUE” where investors have invested keeping the name of Group into consideration not the technicals.

Reliance spent 40 crores in the promotion of the IPO and was the biggest IPO to have ever hit the market. Such huge promotional strategies created frenzy in the minds of common man who does not know much about stock markets. This in turn lead to huge number of DEMAT account openings and huge applications for the IPO who intended to make money on the first day by squaring off their positions on the first day.